Goldman Sachs Mortgage Company, Plaintiff,

against

John F. Mares, Ann F. Mares, “JOHN DOE No.1″ through JOHN DOE #12”, the last twelve names being fictitious and unknown plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in the complaint, Defendants.
2014-0201

LEOPOLD & ASSOCIATES, PLLC
By: Julie L. Mer, Esq.
Attorneys for Plaintiff
80 Business Park Drive, Suite 110
Armonk, New York 10504

RICHARD P. RUSWICK, ESQ.
Attorney for Defendants
401 East State Street, Suite 306
Ithaca, New York 14850
Robert C. Mulvey, J.

The plaintiff has brought this motion seeking summary judgment and an order of reference in this residential mortgage foreclosure action. The defendants, John F. Mares and Ann F. Mares, have submitted papers in opposition to the relief requested by the plaintiff and they have cross-moved for an order granting them summary judgment and dismissal of the plaintiff’s complaint. The plaintiff has submitted reply papers as well as papers in opposition to the defendants’ cross-motion.

The record indicates that the defendants executed a note and mortgage on or about September 30, 2005 in connection with their purchase of real property located at 170 Buck Road in Lansing, New York. The mortgage was given to Mortgage Electronic Registrations Systems, Inc. (MERS) as mortgagee and nominee for the lender, Freestone Enterprises, Inc. The note was given to Freestone Enterprises, Inc.

The record reflects that subsequent thereto, said mortgage and note were assigned by written assignment to various entities, including ultimately the plaintiff herein. On or about October 22, 2008, said mortgage and note were assigned by MERS to AmTrust Bank f/k/a Ohio Savings Bank. Thereafter, on or about August 5, 2009, AmTrust Bank f/k/a Ohio Savings Bank assigned said mortgage and note to MTGLQ Investors, LP C/O Litton Loan Servicing. Further, on or about March 28, 2012, MTGLQ Investors, LP assigned the mortgage and note herein to the plaintiff, Goldman Sachs Mortgage Company. An allonge to the note dated September 30, 2005 and executed by Barrie Beverly, Secretary/Treasurer of Freestone Enterprises, Inc. also indicates that Freestone transferred its interest in the note to Ohio Savings Bank.

The plaintiff commenced this action by the filing of a summons and complaint herein, together with a certificate of merit, on or about March 4, 2014. Issue was joined in the action by the service and filing of an answer by the defendants, John F. Mares and Ann F. Mares, on or about April 2, 2014. The defendants’ answer contains general denials of the material allegations of the complaint, raises various defenses to the action and asserts a counterclaim seeking dismissal of the complaint and discharge of the underlying mortgage upon the ground that the plaintiff did not commence this action to foreclose within six years of the date the action accrued. The plaintiff filed a reply to the counterclaim.

The plaintiff has now brought this motion seeking summary judgment against the defendants and an order of reference. The plaintiff has submitted the affidavit of Richard Work, a Contract Management Coordinator for Ocwen Loan Servicing, LLC, the servicer for the plaintiff herein, sworn to June 11, 2014, and the affirmation of plaintiff’s counsel, Marcelo E. Martinez, Esq. dated June 25, 2014, together with exhibits attached thereto in support of the motion. The plaintiff contends that the defendants defaulted in making payments under the terms [*2]of the mortgage in June of 2007 and that subsequent thereto all amounts due under the note and mortgage were accelerated. Further, the plaintiff argues that the papers submitted in support of the motion are sufficient to make a prima facie showing of entitlement to summary judgment against the defendants and an order of reference in this foreclosure action.

The defendants oppose the plaintiff’s motion for summary judgment and assert that their cross-motion seeking summary judgment and dismissal of the plaintiff’s complaint should be granted. The defendants claim that the plaintiff’s action is barred by the six-year statute of limitations. They argue that the action accrued upon the issuance of the notice of default and demand letter sent to them on or about June 4, 2007 by AmTrust Bank, the plaintiff’s predecessor in interest, and that the plaintiff failed to commence this action within six years of that accrual.

The defendants also contend that the plaintiff’s motion should be denied on the ground that the plaintiff failed to include allegations in its complaint regarding its corporate status and the identity of the state or country under whose laws it was created as is required by the provisions of CPLR 3015(b). Further, the defendants argue that the plaintiff’s motion for summary judgment is premature and that they should be allowed discovery on the status of the plaintiff as the holder of the note and mortgage and the validity of the purported assignments. The defendants claim that the papers submitted in support of the plaintiff’s motion are not sufficient to establish the plaintiff’s standing to bring this foreclosure action. The defendants question whether the affidavit submitted by Richard Work is sufficient since the record indicates that he is an employee of Ocwen Loan Servicing, LLC, rather than the plaintiff, and they argue that it is unclear whether he has personal knowledge of the facts. The defendants also point out that the assignment of mortgage given by MTGLQ Investors, LP to the plaintiff and the undated allonge to the underlying note made by MTGLQ Investors, LP transferring the note to the plaintiff were executed by different individuals, Lynn Bluege-Rust and Richard Williams, Vice President, Litton Loan Servicing LP, respectively, each as Attorney-in-Fact for MTGLQ Investors, LP, but that the power of attorney documents purporting to grant said individuals the authority to execute same have not been provided by the plaintiff.

Upon review and consideration of the papers submitted, the Court has determined that the plaintiff’s motion for summary judgment and an order of reference should be denied without prejudice to renew and the defendants’ cross-motion seeking summary judgment and dismissal of the plaintiff’s complaint should also be denied.

Summary judgment is a drastic remedy, but may be awarded when no issues of fact exist. (see, CPLR 3212 [b]; Andre v. Pomeroy, 35 NY2d 361, 364). In order to be successful on a motion for summary judgment, the moving party must make a prima facie showing of entitlement to judgment as a matter of law by providing sufficient evidence to demonstrate the absence of any material issues of fact. Winegrad v. New York University Medical Center, 64 NY2d 851, 853. Failure on the part of the moving party to make such a prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers. Alvarez v. Prospect Hospital, 68 NY2d 320, 324. However, once such a showing has [*3]been made, the burden shifts to the party opposing the motion to produce evidence in admissible form that is sufficient to establish that material issues of fact exist which require a trial. Alvarez v. Prospect Hospital, supra, 68 NY2d at p. 324; Zuckerman v. City of New York, 49 NY2d 557, 562.

First, with respect to the plaintiff’s motion, the Court finds that the plaintiff has failed to make a prima facie showing of entitlement to summary judgment and an order of reference since it has failed to adequately demonstrate that it has standing to bring this foreclosure action. Where, as here, the plaintiff’s standing or legal capacity to sue has been challenged in the pleadings, the plaintiff must prove its standing in order to be entitled to relief. (see U.S. Bank National Association v. Faruque, 120 AD3d 575). The plaintiff must then demonstrate that it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced. (see Kondaur Capital Corp. v. McCary, 115 AD3d 649, 650). “Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation and the mortgage passes with the debt as an inseparable incident.” U.S. Bank N.A. v. Collymore, 68 AD3d 752, 754. In this instance, the Court finds that the conclusory statement contained in Mr. Work’s affidavit regarding the plaintiff’s possession of the note lacks any details of a physical delivery of the note and thus fails to establish that the plaintiff had physical possession of the note prior to the commencement of the action. (see U.S. Bank National Association v. Faruque, supra at 633; Deutsche Bank National Trust Company v. Haller, 100 AD3d 680, 682; cf. Aurora Loan Servicing, LLC v. Taylor, 114 AD3d 627). Moreover, to the extent that the plaintiff relies upon the assignment of mortgage and allonge documents attached to the plaintiff’s motion papers to establish standing, the Court finds that such documentary evidence is insufficient since it does not include a copy of the power of attorney or instrument granting authority for any of the documents that were executed by an attorney-in-fact or authorized agent. (see Deutsche Bank National Trust Company v. Haller, supra at 682; Bank of New York v. Alderazi, 28 Misc 2d 376, 379-380).

As to the defendants’ cross-motion seeking summary judgment and dismissal of the complaint, the Court has determined that said motion should be denied since it finds that the plaintiff’s action herein was timely commenced and the defendants have not otherwise demonstrated their entitlement to a dismissal of the complaint.

“It is well settled that, even if a mortgage is payable in installments, once the mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt.” EMC Mortgage Corp. v. Patella, 279 AD2d 604, 605. An election to accelerate the mortgage must consist of a notice of election to the mortgagor or some overt act manifesting such an election. (see 466 W. 44th Street, Inc. v. Riverland Holding Corp., 267 A.D. 135, 137). Such an acceleration must be clear and unequivocal. (see Sarva v. Chakravorty, 34 AD3d 438, 439). In this instance, the notice of default letter sent to the defendants on or about June 4, 2007, by AmTrust Bank, the plaintiff’s predecessor in interest, demanded only the amounts then due or to become due and indicated that failure to pay the total amount past due may result in [*4]acceleration of the sums secured by the mortgage. In this Court’s view, such letter did not constitute a clear and unequivocal acceleration of the entire mortgage debt.

It is undisputed, however, that on or about March 6, 2009, the plaintiff’s predecessor in interest, AmTrust Bank, commenced a mortgage foreclosure action against the defendants herein by the filing of a summons and complaint with the Tompkins County Clerk (Tompkins County Index No. 2009-0260). That action was based upon a default in connection with the underlying note and mortgage herein. The commencement of that foreclosure action constituted an acceleration of the underlying mortgage debt herein. (see EMC Mortgage Corp. v. Smith, 18 AD3d 602). The acceleration of the underlying mortgage debt herein having occurred on or about March 6, 2009, the Court finds that the commencement of the plaintiff’s action on March 4, 2014 was within the six-year statute of limitations (CPLR 213 [4]) and was, therefore, timely.

Further, to the extent that the defendants seek dismissal of the plaintiff’s complaint upon grounds that the plaintiff failed to comply with the provisions of CPLR 3015 (b), such relief is denied. The plaintiff’s complaint is subject to amendment and the defendants have failed to demonstrate that they were prejudiced by such noncompliance. (see Dari-Delite v. Priest & Baker, Inc., 50 Misc 2d 654; Horizon Staffing Solutions, Inc. v Schwartz, 17 Misc 3d 1127A). The Court also notes that the plaintiff’s reply papers contain documentary evidence which indicates that the plaintiff is a domestic limited partnership located in New York County.

Lastly, with respect to the defense raised by the defendants that they have received a Chapter 7 discharge in bankruptcy and are not personally liable for any mortgage deficiency, the plaintiff, through its counsel, has indicated that it will honor the discharge and not pursue the defendants for any mortgage deficiency.

Accordingly, for the reasons set forth above, it is

ORDERED that the plaintiff’s motion seeking summary judgment and an order of reference is hereby denied, without prejudice to renew, and it is further

ORDERED that the defendants’ cross-motion seeking summary judgment and dismissal of the plaintiff’s complaint is denied, and it is further

ORDEREDthat, to the extent the defendants wish to conduct discovery relative to the authority held by those individuals who executed an assignment of mortgage or an allonge to the note as an attorney-in-fact or an authorized agent, they are hereby granted 90 days from the date of this Decision and Order to complete such discovery and the plaintiff may not renew its motion herein until any such requested discovery is completed.

This shall constitute the Decision and Order of the Court. No costs are awarded on the motions.

Signed this 14th day of November, 2014 at Ithaca, New York.

______________________________

Hon. Robert C. Mulvey, J.S.C.